In the last blog post, I ran some numbers in the Urban Worm Calculator and detailed what giving away or selling your worms too soon does to the future value of your worm stock. If you missed it, here it is. If you don't want to go back and read it, just know that it can be bad. Really bad. Like thousands of dollars bad if your reproduction rate is healthy.
This post takes that concept a little further. You've learned the lesson that you shouldn't sell or give away those worms too early. But once you've amassed an amount of worms you're comfortable selling from, the next question is how many you can sell each month without suffering a reduction from the previous month. If instead of worms we were talking about money, the question we'd be asking here is “What is the interest my investment is making?”
This all depends on your particular circumstances. You just have to ask yourself a series of questions.
Questions To Ask
- How many worms am I starting with?
- How fast will my worms reproduce?
- How much space do I have to grow worms with?
- And how densely will those worms be populating that space?
- How much revenue do I want to bring in monthly?
- How many worms will I be harvesting each month?
- What percentage of my worms will die in a given month?
The calculator is going to use your answers to find your Sustainable Harvest, which is a fancy way of saying the amount of worms you can harvest each month without causing a decrease from the month prior. To go back to the money example, this is the “interest” you are living off of.
The Urban Worm Calculator will find your Sustainable Harvest by:
- Taking the previous month's quantity
- Adding the growth from whatever reproduction rate you input
- Subtracting planned harvests for that month
- Subtracting the whatever worm die off you input for that month
Once you identify these numbers, it's time to set your Sustainable Harvest Goal. Armed with this information, the calculator will tell you what month you can expect to reach this goal.
*Note: The Sustainable Harvest Goal assumes you don't want a reduction in your worm population. But you may actually want to liquidate a good part of your worm supply during periods of high demand, knowing you have the lower-demand periods in order to play catch-up with worm reproduction. In this case, you can tell the calculator how much you plan to harvest in each specific month.
Let's Use an Example
Let's pretend you're just planning to start your worm conglomerate today but didn't have a way to project a Sustainable Harvest. And let's also pretend you have zero business sense. (That's not the case of course, right?)
Assume the following:
- Start Date: 7/1/2015
- Starting Quantity: 10 lbs
- Monthly Reproduction Rate: 30%
- Worm Unit Retail Value: $25/lb
At this point, the calculator has enough information to crunch some numbers for you. And if you notice from the screenshot, there is this cool little sidebar that will follow you around the screen, basically acting as a “scoreboard” to give you basic results information as well as tell you when the calculator thinks you will hit any goals you set. If all you set in were the
Speaking of goals let's say you've got your heart set on that $80,000 Tesla Model S and plan to take out a 5-year loan to do it. This will run you about $1400/per month. You divide that $1400 by $25 and find you'll need 56 lbs to make that car payment.
You set 56 lbs as a Quantity Goal and the Scoreboard shows you'll hit that amount in December 2015.
So you set up your grow bins and cultivate your stock until December at which point you unleash your inner salesman and offload your 56 lbs of worms at $25 per lb to a local chicken farmer who must not have asked for a bulk discount.
Awesome! You just made 1400 bucks! That's a car payment.
But of course you just sold the very worms you would need in order to make next month's payment.
For the sake of the example, just pretend that never happened, you have all of your worms back, and now you do have some business sense. What we really need to know how much wiggling worm meat you can harvest month after month after month to keep the repo man from taking your new car away.
By inputting a Sustainable Harvest Goal of 56lbs, the scoreboard now says you'll hit your goal in May 2016.
As you know, worm farming is more complex and time consuming than this, but the math is pretty much that simple.
So what the Urban Worm Calculator and specifically its Sustainable Harvest Goal can do is:
- Tell you when you’ll be able to meet a revenue goal that is sustainable month after month
- Help you decide if you should start selling today or use a drop shipper in the meantime and wait until your stock multiplies further
- Give you a way to see future shortages so you can adjust today's sales to meet tomorrow's demand
- Account for monthly fluctuations in reproduction rates, harvests, and die offs so you can have more accurate projections
A word of caution. The numbers the calculator gives you are profoundly affected by whether or not you can hit the monthly reproduction rate you assume. And that rate is subject to unpredictable environmental issues like heat, cold, drought, predators and theft as well as your own ability to invest the manpower needed to maintain that reproduction rate. In other words, the calculator can tell you what can happen, not what will happen in your case.
The next post will be the “owner's manual” for the Urban Worm Calculator, complete with a walk-through video. It will help you understand all the numbers you put into it and all the results it calculates for you.
Until then, thank you for reading!
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